RESOURCE MOBILIZATION

Africa needs external support if it is to succeed in reversing the current
trend in environmental degradation. As discussed in earlier chapters, the extreme
poverty suffered by many Africans is a major factor contributing to the degradation
of Africa's environment. For example, the fact that in Sierra Leone the poorest
20 per cent of the population benefits from only 1.1 per cent of income consumption
indicates that the majority of its people are deriving livelihoods from subsistence
activities largely based on environmental goods and services. Should this trend
persist, environmental degradation will continue unabated, and at tremendous
cost to the country. Uganda is another example-a conservative estimate puts
the annual cost of environmental degradation at 4-12 per cent of the country's
GNP (NEMA 2001, Slade and Weitz 1991). If corrective actions are not financed
and put in place, the cost of this degradation is likely to increase.

It was agreed at the UNCED (1992), where most African states were represented,
that implementing Agenda 21 would require new and additional financial resources.
African countries have received external assistance for environmental management,
but the resources received have been inadequate, partly because the new and
incremental funds being made available to them are less than those agreed at
UNCED, and partly because procedural difficulties are hindering access by many
African countries to the little funding that is available.

External aid nevertheless represents a significant share of national budgets
in Africa-especially in sub- Saharan Africa-and dependence on aid is even more
pronounced when it comes to investment in environmental management. Dependence
on external aid raises concerns in Africa as to adequacy of funds, sustainability
of interventions, and freedom to reflect national priorities rather than priorities
perceived by donors. However, in spite of such concerns, incremental funding
will still be required if African countries are to continue with implementation
of Agenda 21. Moreover, access to funding will have to be easier than at present,
and it must be largely in the form of grants rather than loans, however soft.

While it is clear that Africa needs external support in its efforts to reverse
environmental degradation, African governments also need to recognize that environment
is a priority area for investment. They could, for example, include environment
as a priority area for intervention in national poverty reduction strategies.

Furthermore, African states often put too much emphasis on accessing external
sources of funds, almost to the exclusion of domestic resources. They should-if
they are to become more self-reliant-be more proactive in identifying and developing
creative mechanisms to generate funds from the region's significant environmental
resources. They could improve the generation of non-tax revenues from environmental
resources and services by moving towards charging economic rates for them. Valuation
of their environmental resources on the basis of total economic value would
allow African governments to introduce more appropriate taxes and to develop
nontax sources of revenue, such as user fees. The rationale for, and the benefits
of, investing in environmental management are presented in Box
5.4.

Box 5.4 Rationale for and benefits of investing in environmental
management

Rationale

Halting or reversing of environmental degradation so as to guarantee
improved productivity of the environment, with a view to accelerating
sustainable economic growth and improving human welfare.

Building and strengthening of human institutions and capital
in environmental management, to allow continual response to new
demands and challenges.

Holding open future options for resource conservation and development,
by formulating good policies so that irreversible losses are avoided,
and positive conservation culture and attitudes are inculcated.

Expected benefits

Increased earnings at macro and micro levels, due to improved
productivity of biotic elements.

Avoiding losses of future income (for example, by controlling
the impact of soil erosion on agricultural productivity).

The collective will of African states to arrest and to reverse environmental
degradation exists, as evidenced by the wide range of responses presented in
Annex 1. African states, and regional and sub-regional
organizations, also want to do more, as illustrated by recent resolutions (AMCEN
2001). The main limitations are financial-mobilization of additional resources
is, therefore, a priority.

THE PROBLEM OF DEBT

African countries are generally poor and heavily indebted, although the level
of indebtedness is declining (see Figure 5.3). Nonetheless,
however small the debts may be in absolute amounts, when indexed to debt servicing
abilities, they are still a constraint. Despite these odds, African countries
have been able to leverage additional funds from external sources for investments
in environmental management and, by and large, they have enjoyed goodwill from
development partners. Key sources of external financial inflows include loans
from the multilateral and regional development banks, and grants from bilateral
donors and other agencies.